Liverpool hospital PFI deal scrapped

26 Sep Liverpool’s health service trust has decided to terminate the private finance initiative (PFI) contract that had been enabling construction of the new Royal Liverpool Hospital.

The new Royal Liverpool Hospital

The £335m project has been stalled since the collapse of main contract and project partner Carillion in January 2018. The board of the Royal Liverpool & Broadgreen University Hospitals NHS Trust has decided that the best way to revive the project is to terminate the PFI agreement with The Hospital Company (Liverpool) and bring it back into the public sector.

Press reports indicate that the government will confirm its agreement to bail out the scheme with public money in the coming days.

In a statement yesterday the trust said: “Subject to detailed government approvals, and legal agreements being finalised, we intend to have a managed termination process after 30 September, by which the benefit of the analyses and pre-works discussions by the lenders will be transferred to the trust. This will see The Hospital Company (Liverpool) hand over its contracts for construction, supply chain and facilities management, to the trust, over the course of the next few months.

“This is now the fastest way in which we can see construction on the new Royal restarted and means we have outlined a process for doing so. This is really positive news for our staff, patients and the people of Liverpool. We now have a solution and can work on moving forward.”

As previously reported, the new hospital is near completion but requires another 12 months of construction work to complete it. Subsequent legal and financial negotiations have been complicated, and made even more so by Carillion’s mistakes. Consulting engineer Arup has been engaged over recent months to identify the work required to complete the scheme, including structural improvements and replacement of combustible cladding the Carillion installed.

The Unite union has called for the Arup report to be made public. Unite assistant general secretary Gail Cartmail said: “Given the problems associated with the hospital project, the people of Liverpool need to be reassured that the hospital will be safe and structurally sound. To begin doing that we need the trust to publish the structural survey detailing the defects on the hospital.”

Work began on the new hospital in 2014. It officially topped out just before Christmas 2015 and was originally supposed to have been handed over in March 2017.